Graphics Interchange Format. GIFs are image files that are compressed to reduce transfer time. The proper pronounciation of the acronym is a soft "g" sound: like JIF.
The creators of the format, Bob Berry & Steve Wilhite, claim that this soft "g" sound is used. At some point one of them said, "Choosy programmers choose GIF," a play on the peanut butter commercials where "Choosy moms choose Jif." It can also use multiple images for animated effects (animated GIFs).

I'm using a GIF because it's just faster to up/download.
Hey, the dancing Stewie animated GIF you put on your myspace is awesome.